Throughout the southern United States, pine saw timber prices will be 6.4% lower in 2011 than expected six months ago. Results vary across states, with Alabama, Arkansas, Georgia, and South Carolina best positioned to rebound quickly as lumber demand strengthens.  

"Expectations for key macroeconomic factors – such as GDP and housing starts – have, frankly, proven to be way off-base," said Tim Sydor, forest economist. "GDP grew faster than expected, but housing starts are expected to remain 30% below 2009 projections. As a result, we've adjusted our forecast of U.S. softwood lumber consumption downward by 6.3 billion board feet for 2010. Lower lumber demand means lower stumpage prices, and pine sawtimber prices in the South have been revised downward by nearly USD 1 per ton for the year."

Brooks Mendell, Forisk's president, agrees that 2010 is a "bridge" year and emphasizes to investors the benefits of patiently following local markets. "Robust local markets, with capitalized mills and resilient loggers and wood suppliers, pay dividends to their investors through faster recoveries."  

Pulpwood demand, relative to saw timber, is distinct for the complexity of its end-use markets. "We follow several factors that have push-and-pull effects on pulpwood demand and stumpage prices," said Sydor. "For instance, while a housing recovery lifts demand for pulpwood from OSB producers, it decreases demand for roundwood through increased residual chip flows from lumber mills."

Forisk projects that 9.6% of pulpwood demand across the South will come from new bioenergy facilities. "Bioenergy and OSB end-use markets drive any growth in pulpwood demand over the next 10 years," Sydor said.

Pine pulpwood and saw timber forecasting products from Forisk Consulting help industry leaders follow and understand the effects on stumpage prices from the economic recovery and changing demand for lumber, pulp, and bioenergy products. For more information, visit www.foriskstore.com and click "Stumpage Price Forecasts."